tv Today in Washington CSPAN August 6, 2010 6:00am-7:00am EDT
we're 16th in the world in manufacturing-related wages. >> thank you for your leadership of all kinds of economic issues. i would like to introduce william strauss, senior economist at the federal reserve in chicago. mr. strauss joined the federal reserve in chicago in 1992. he analyzes the current performance of the midwest economy in the manufacturing sector for use in monetary policy. he produces a monthly manufacturing index, organizes the bank economic outlook symposium and annual auto outlook symposium, conducts several workshops and roundtable throughout the year. he currently teaches at the university of chicago, the gramm school of general studies.
pimm mr. strauss, welcome. we look forward to your testimony. -- mr. strauss, welcome. >> chairman brown and members of the economic policy subcommittee, i am pleased to share with you some perspective on long-term trends and observations on how the recent recession and recovery are expecting -- affecting manufacturing. one major issues the extent to which we should be focusing on the number of people employed in this sector and the overall output. interestingly, each leads to opposite conclusion about strength of manufacturing in the united states. let's start off with employment. manufacturing employment, as a share of total employment, has been declining over the past six years. moving down from 31% in 1950, to 9% in 2009. observations on the amount of
real goods projections are very different. manufacturing output in 2007 amounted to a level of over 600% higher than that in 1950. that translates into an average growth of 3.4% each year. hal is manufacturing able to produce such a surge of the past six years, but even with declining employment? the answer is productivity. with the application of new process technologies, better management, and new product innovations, productivity growth in the manufacturing sector averaged 2.9% over the past 60 years. between 1950 and 2007, productivity growth and technological advancement allowed manufacturing output growth to exceed the growth of the overall economy. yet though it seems to be a contradiction at the same time, manufacturing sector's share of gdp has been declining. the seemingly paradox can be
easily explained. the greater efficiency of the manufacturing sector has supported either a slower increase or outright decline in the presence of goods they manufacture. while declining prices have led to a greater unit demand for manufactured products, increase demand has not fully compensated for the lower prices. so too, that output growth has not translated into an increase in every manufacturing sector. when of the great sphinx of the u.s. economy is the ability which is one of the great strengths of the u.s. --ability > one of the great strengths of the u.s. economy is the ability to reinvent itself continually. nor has manufacturing and denies itself from the business cycle.
the recent recession impact of the economy quite parsley. manufacturing output, which peaked in december 2007, fell by 17.5%, bottoming in june last year. with a severe loss of output, manufacturing jobs declined by 16% during 2008 and 2009. over 2.1 million in part train workers lost their jobs. -- over 2.1 million manufacturing workers lost their jobs. over the past year manufacturing output has increased nearly 9% and has recovered 42% of the loss experience during the recession. interestingly, the industries that have the experience a large increases over the past year were the same industries that were the hardest hit, motor vehicle and parts and primary metals. this year the manufacturing sector has been adding jobs each
and every month for a total of 136,000 jobs. the manufacturing sector remains of a vibrant, innovative industry in the u.s.. output has been rising at a solid pace over time, and most of the growth, in particular over the past 30 years, has been achieved by a increasing productivity. this increase in productivity has been a double edged sword. on one side to increase in productivity has fostered a globally competitive sector. being more productive often means that a producer can increase output without the need to add flavor. these movements in output, productivity, and labor have not been confined to the past two years, but have been taking place for decades. if these manufacturing sector trends continue, we cannot afford to a sector that will continue to produce the ever increasing amounts of output, while contributing to a stronger u.s. economy.
>> thank you. hinchey for your testimony, mr. strauss. i am concerned. -- thank you for your testimony. i am concerned that in your testimony, understanding the role of productivity, we have the most productive work force in the world. we know that, but we also looked at a country like germany, which pays much higher wages, has significantly higher unionization rates as we do. they export in value more goods than we do, a country four times the size and population more or less.
i know that we're very productive. i know german workers are very productive. just two weeks ago chairman bernanke sat in the see you're sitting at and i asked if the chinese exchange rate policy is a subsidy. i think most of us believe on this committee that there is a currency issue. how would you answer that question? is china's currenciey undervalud and how much it bid is? >> with regard to the currency issues, and certainly i have read and heard different testimonies and read different studies that suggest that china's currency is undervalued. that would imply a subsidy is taking place. i would also highlights that if there was a re-evaluation of
that, it is not clear that would necessarily bring jobs back in a large amount. businesses are looking for the least costly way of doing their business, and quite often a lot of the goods are relatively low and evaluated, and that is white they are moved to china to take advantage of the lower-skilled and lower-paid wages that take place there. and then there would be alternative sources that could very well be outside of the united states. >> does it concern you that as we have lost -- you are in the midwest in chicago. i know my state is not your jurisdiction, most of my state, but i know you know what has happened in medium-sized towns and fairly big cities with a falling out of manufacturing -- with the hollowing out of
manufacturing. does it concern you, the business model that we have pursued in the past 20 years? i believe it is unprecedented in history that our business model for many corporations are to lobby the congress for a certain kind of trade laws and tax law and then move production to another country and then sell those products backed into the united states, into the mother country, if you will? i do not know that that has ever happened in history. that is not the whole story. does that concern you as a business model that we have decided by the way we write tax law and trade bloc, the way we deal with currency, the way we deal with everything from the international trade commission to the department of commerce that that has become operating business plan for much of america's large corporations? >> mr. chairman, i certainly can appreciate and understand the concerns about communities when
they see a factory that gets closed and how that can impact that community quite severely. those kinds of decisions are best left to congress with issues surrounding subsidies, taxation, and so forth. i can share that historically over time that manufacturing as a whole has risen because of how efficient we are. i would exercise caution with regard to moving forward with any kind of policy that would cause the manufacturing firms to become less efficient and productive, which has allowed it to grow. >> you think the trade policy and the tax policy is and has served american efficiency and productivity -- has served american efficiency and productivity as well as it can? >> that is a question that i am
not prepared to answer at this point, senator. >> ok. >> think you, senator warner. -- thank you, senator warner. i agree with senator brown. we may have different views on how we go at trade. i think it is an issue that it is our responsibility to take on. where i would like to focus my line of questioning is on small to midsize businesses that have been particularly hard it. -- hard hit. i got added to an american compete for the legislation list that would allow small and medium-sized businesses to access high-performance computing, which again, helps them.
larger companies have already use these tools to increase productivity. i would like comments on that i would like to have comments on one of the the things we have talked about. we've lost a lot of apparel- related jobs in my state. i do not think they're coming back. i am particularly interested in high-value manufacturing. one of the concerns that i have as a former governor that made me crazy was the lack of coordination on federal job- training programs. i'd think we have 34 separate programs. -- i think we have 34 separate programs. i would love any kind of comment to my home on consolidation of work force training, particularly as we work toward higher-value training. i would argue one of the reason that germany does better on value-added manufacturing is the put a lot more in their training initiatives. finally, while you may not want
to answer a question about trade policy, i do think we have not served our small and medium- sized manufacturing companies well on making them familiar with how they can do a better job of exporting. for so long america's market was so large and we did not need to look abroad. i would be curious if you had any thoughts on that. high-value computing in terms of medium-sized manufacturing, work-force training, and then what we can gdue for a manufacturing policy. >> thank you for the concerns. i sure everyone of them and understand the issues. with regard to high performance that does come about. we have had the opportunity of having the largest trade show in the country, and second-largest
in the world take place every two year. this is the year it will come to chicago in september. in this an absolute marvel to go and tour the show and see how overtimed the type of manufacturing has changed. in particular, the ramp up in productivity over the past 30 years coincides with the introduction of this computer callnumerical control that began earnest in the late 1970's. over time companies have still been trying to figure out the ways of continuing to become more and more efficient. this machinery is one example. we had a conference in chicago about five years ago where we invited companies from all over the region to talk about productivity is going, and one of the questions i often get is can we stream even more productivity out of this?
the story revolves around a woman who was running a machine shop. the machine has gone so efficient ship brought in the second machine and ask all workers to start running that machine at the same time. -- the massena to -- machine had gotten so efficient that she brought in a second machine and asked the worker to start running that machine at the same time. he was neglectereluctance becaut was his job. technology brings more and more efficiency to our jobs. with regard to the education side, i completely agree with you. education needs to be a primary focus for our work force. certainly in manufacturing. i hear from contacts that they find that ait a challenge to
find a qualified workers to operate in the computer sector. whatever we can do with regard to work force training and apprenticeship programs, those are key. with regard to exports, i agree with you. for many years we were able to proceed with living off of how good we were doing within our own economy, and that allows smaller companies to be successful without thinking internationally. we see more and more small firms helped through some of the gold key programs. i try to keep tabs on that as well. >> thank you, senator warner. i think the point about small manufacturers is so important. i watch machine shops, small specialty shops supply companies that are typically
non-union, 1500 employees that the in the auto supply chain or some other component manufacturer. the large company will move to mexico or china. they do not have the wherewithal to export typically. they have lost their biggest customer. >> that might be a subject of a future hearing, because i really think that sector -- we may not be able to solve every challenge, but there could be targeted assistance. >> senator merkley. >> thank you for your testimony. oregon is one of 17 states were manufacturing makes up more than 10% of employment. it is a source of good paying
stable jobs, except when those jobs go to mexico and asia, as they have routinely. as you think about the challenges and dynamics in the midwest and recognized and other regions have different factors at work, what do you see? when you look at the northwest, what makes the northwest manufacturing economy different than the area where you spend most of your time on in terms of the midwest? are their insights about the intelligence and the rest of the country? >> when i think about the northwest i think about the aviation industry. the point about some of the trends we see in terms of employment, you know, these are
issues, the productivity we have been experiencing is not solely a u.s. phenomenon. we're seeing productivity growth has been all around the world. similar trends with the loss of employment. in a study that wa. s put out five years ago that looked at manufacturing trends between 1995 and 2002, and their estimates are that china went from having 98 million workers in manufacturing in 1995, down to 83 million in 2002. in essence china lost the same number of jobs in manufacturing that we have in manufacturing. we can answer that list with brazil, russia and so forth. the productivity trends are happening all around the world on the employment share.
>> well, thank you. i am not sure that got to the heart of the distinctions in the regions, but one thing i think that is common around the region is that you have a workforce that is less prepared in areas such as welding, machine operation, and so forth. just about everyone i knew took metal shop and wood shop in either middle school or high school, and added to the fact was the fact that we grew up building things and garages, and neither of those are true now. the class is in school are gone come in the kids are on the computers -- and the kids are on the computers rather than utilizing tools.
just not enough folks trained in the cracks or interested in the cross. do you think that is a real factor? -- just not enough folks trained in the crafts or interested in the crafts. >> things have softened up clearly. while things have improved, we're still quite weak. these kinds of jobs, there tends to be shortages. what we can do is foster greater amounts of skills training, again, through some of the technical schools, apprenticeship programs, and allowed firms themselves to train their work force.
>> i will conclude with one last question. up through about mid-1970's, as productivity increase, the wages of working americans increased. add about that time, the kurds started dramatically diverging. -- the curves started dramatically diverging. you would think we would have a proportional increase in wages, but as you look at the diversions and those curbves, ay insights on that? >> i share your concern with regard to the real increase in wages that have been taking place. to give back to the education site, we have seen over time there are rewards to greater amounts of education. when you look at the
differentials between obtaining a college degree, associate degree, or even technical training, there are definitely rewards. education is a big key to advancement. i would encourage those types of things. the only other thing i would highlight is one of the benefits of the searcher productivity has been the ability of goods that have been showing relatively slower rates of increase or are right declines. auto industry for the past 10 years, prices of the vehicles have fallen each and every year toward the past 10 years, making those products more affordable to the average american. >> can i just ask one thing? can you repeat what you said about the work force size and china actually declining within
the manufacturing sector? >> there was a report that was put out back in 2005 that employment in china peaked at 98 million in manufacturing. keep in mind, the size of the entire work force is 148 million. by 2002, it had fallen down to 83 million. it fell even further to 80 billion in 2000 because of the asian crisis but then bounced back up to 83 million. we're seeing these trends throughout the world. . .
nicole lamb-hale was nominated by president obama, it unanimously confirmed to serve as assistant secretary for manufacturing and services. she helps to strengthen the role. secord needs a, department strategies and policies with u.s. industries in mind -- she hopes to coordinate these. she convinced experts inside and outside the government -- convenes them to talk about issues faced by the industry.
prior to that she was manager of a law firm in detroit. she specialized in manufacturing. roger kilmer has been with the manufacturing extension partnership since 1993. previously, he was the deputy director, serving as a chief operating officer and financial officer. he received a civil medal award for leadership -- the silver medal ward. he received a bronze medal for superior leadership of the robotics program. manufacturing extension partnership is a public-private partnership leveraging federal support by teaming with industry as well as local organizations. in my state, it is there an effective with small companies with nearly 300 offices in all
50 states. it provides services and access to resources that enhance activity. >> to go. thank you for this opportunity testify before you today on the president's manufacturing agenda and what we at the department are doing to promote u.s. manufacturing. the department of commerce is committed to promoting this important sector. we do it daily by working to create the right environment to help manufacturers sustain and growth companies, and create jobs. in december 2009, the obama administration released a strategy entitled "a framework for revitalizing u.s. manufacturing to get the department addresses several components, including helping workers transition to a better future. we're working with other
agencies such as those departments of transportation and secretary, and the sba. as assistant secretary, i believe it is critical to ensure the manufacturing sector is strong. manufacturing extension partnership i dudley works to ensure it the sector is competitive globally. our programs and partnerships are strategically developed to support the needs of the u.s. men crashing sector, and president's agenda. mass industry analysts and economists have extensive knowledge of the subject, and based on their analytics we provide decision-makers objective data to develop and implement policies to support u.s. manufacturing competitiveness. it follows a three-pronged approach. to convene, collaborate, and connect. we convened experts inside and outside of the government to
work toward solution to problems faced by the industry. it collaborates with agencies around the federal government to implement solutions to increase competitiveness, and mas works to connect industry with federal government resources to help u.s. companies compete abroad. i would like to share a few examples of the three c's at work. it convenes the manufacturing council to advise and ensure regular communication between the federal government and manufacturing sector. the commerce secretary announced a newly appointed members of the council this afternoon at 2:00 p.m. in the senate visitors center. it will look at the critical issues. finance, and energy particularly. mas collaborates with other agencies to deliver programs. it developed the department sustainable many freshmen initiative.
we work with industry and other federal agencies to showcase practices that help company reduce operating costs. in september, we will launch a new initiative, many fresher america, to help to connect manufacturers to resources to help them rethink and retool operations. it is designed to enable them to explore new products, markets, practices, and finance sources. we expect it will help sustain and create jobs, and will particularly focus on needs of small and medium-sized manufacturers. the administration's free-market recognizes exporting goods is a key component to revitalize the u.s. many fashion. in the state of the union address, the president announced the export initiative and set the ambitious goals of doubling exports in five years to support several million jobs. mas and other bureaus are developing initiatives and improving implementation of
existing programs to support the goals. we're also strengthening inter- agency coordination of efforts by working with others across the trade promotion committee. but the emerging markets and our key, a traditional trading partners offer export opportunities for u.s. manufactured goods. leaders are likely to be found in high-growth sectors such as medical devices, aerospace, clean energy, technology, an infrastructure. mas is currently developing sector-specific local strategies to guide policies. we have taken on and are planning a variety of actions to expand exports to traditional and emerging markets. for example, the initiative in may to china resulted in immediate sales data that over $20 million. the mission came at a critical time when the chinese leadership expressed a clear commitment to adopt clean energy technologies,
and u.s. companies are developing and commercializing these technologies. the department and ita are prioritizing existing programs that offer the highest return on guzman. one such program is the market development program. for every federal dollar, we estimate $131 in exports is generative. mas is also addressing the critical financing needs of manufacturers. for many companies who will participate in the manufacture america, financing is a significant jones. we're working with the treasury department and local banking groups. president obama has proposed legislation that includes a $30 billion small-business lending fund, and a state small-business credit initiative. these are two parts of a small business job package the president hopes to sign into law. i have mentioned only some of
the strategic initiatives we are employed to support the president's manufacturing agenda and initiative. we at the department continue to work to ensure the business environment both domestic and international are fair to u.s. manufacturers. thank you for the opportunity to justify it on the activities of the department. we undertake to enhance the competitiveness of u.s. manufacturing. >> roger kilmer? >> chairman brown, members of the committee, thank you for the opportunity to discuss the efforts of the housing and urban affairs committee, and how it supports american manufacturers. today would like to talk about a few of the services it offers. and the access to capital to support the growth. first i would like to give you a brief overview. with a nationwide network of over 400 locations around the country, helps to strategically
employment growth opportunities and improved position in the market. in fiscal year 2009, served nearly 32,000 clients, reporting in billions of new sales, $1 billion in cost savings and creation of nearly 50,000 new jobs. we're working to harness technology and innovation. facilitates the adoption of technological in addition, especially clean ones. we all know improving processes, developing new products, for accessing new markets requires the capital. for most smaller ones, securing capital is often frustrating and complex. with capital even scarcer in today's averment, the process is more difficult for even his
starkly-successful companies. the advisory board found many small manufacturers, even healthy ones, have been unable to finance growth and project diversification plans. accordingly, is tackling the issue from a number of angles. i like to give an overview of the ongoing work in these areas. it is working through the network of partnerships with other federal, state, and local organizations to more effectively access the myriad of programs to provide capital to finance growth. as an example, on the federal level, uses its capital with enterprises systems providers as a mechanism to learn about programs that can provide m financing. we use it as a quick reference guide. mep is also sharing information
on private sources of capital and finance. for example, it is reaching out to the equipment leasing committee to provide manufacturers what information on leasing strategies as possible options for equipment acquisition. it is also in gauging the bank of america which represents the elite 5000 community banks throughout the nation. through these, mep looks to enhance the understanding of how the system serves a technical resource on manufacturing issues. it supports manufacturers as a good investment for these institutions. another example, mep helps companies to develop export opportunities. it has developed the export tax program to assist with developing international growth plans. it connects the company with organization and resources, including financial ones, that can help them move quickly beyond planning to actual export
sales. another expanding area that requires access to funding to resources involves improving the energy efficiency of operations. as a result of the focus on reducing consumption, it is delivering services that help to make changes to become more efficient. we are piloting a new effort called e3, that stands for economy, energy, and and vermin. it combines the resources of five federal agencies, local government, and utilities to enhance sustainability in local and regional economies. another, gsn, is the collaboration between several agencies and focuses on the dual challenge of reducing environmental impact while increasing the company's efficiency, productivity, and profitability. as i have mentioned, raising capital is one of the most basic
business functions. but for many smaller manufacturers, it is often difficult. to bridge the gap, mep looks at ways to improve access to financing options. smaller many freshers positioned to move to the next level, whether in development of new products, markets, or sales, made clear strategies to secure capital resources to achieve it. with our partnerships and toolbox of services ourmep is uniquely positioned to provide them with a better understanding of the range of options, and resources that match their exact needs. the continued on corp. will give manufacturers the information they need to implement growth strategies, resulting in new sales, expanded markets, technology adoption, and sustainability. thank you for the opportunity to testify. >> thank you. i understand that mep has a
partnership with the energy department to determine domestic capacity and programs funded by the ara. we're all concerned with the texas wind turbine farm, not having developed enough supply chain -- i understand the way it works. when doe was request, it poured it on to you, the information, and to advertise for a product specifications your network. i understand there is a bit of an incentive for you to find those suppliers. how was it working the? >> very well. we're pretty much on the front end of the process, but have already had quite a bit of success in being able to find local suppliers. one of the advantages is with a national network we can broadcast this anywhere in the country, to find those domestic sources for the components.
>> if you are doing that with doe, is there potential for dot? i was speaking with the secretary one day about high- speed rail. pretty much the only countries that have a well-developed manufacturing system or capacity are france, germany, china, and japan. that is not to say we don't build a lot of the components. for example, in dayton, ohio, there is a company that builds them for rail. could we apply for you are doing to dot, and dod? do you need legislative authority the? >> absolutely. no, we do not. for example -- with the wind energy -- we have had examples
in the states where potential many pressure would like to move operations to the u.s., but one of their concerns is the access to suppliers. we are able to work with them and states involved to identify and locate those suppliers to can support that operation. >> and assembly, a company that assembles the final wind turbines? >> many small manufacturers make all the same components that have been providing to the automotive industry, that are similar to what is needed. >> do you need an official request from dot to begin the process? >> we have started some conversations with them, but it is only preliminary. any help would be useful, but honestly, they understand the need. >> i think they understand that if -- there is talk of the next 20 years of building some 25,000 rail cars.
and maybe 2000 locomotives. for high speed, and less than high speed rail and streetcars. we don't have the capacity while other countries do. there's no reason we cannot do more of the supply chain here. we will follow up. ms. nicole lamb-hale, poorly coming from senator warren's first comes about wages in manufacturing in some number of european countries, contrasting with ours, but to talk a little about germany and get your thoughts on making a comparison. german exports came to $1.10 trillion in 2009, $125 billion more than our exports. their unemployment has dropped from 9.1% down to 7.6%.
their yearly trade balance went from a deficit 12 years ago of $6 billion, down to a surplus of $760 billion -- up to that amount and addictive. our trade deficit was five and a $69 billion, and something close to $600 million per day from china by laterally alone. germany's annual growth rate per capita exceeded ours. what do we learn from that? what are they doing that we're not in the manufacturing? how the decide a strategy as you put together a policy for president obama -- what do we learn the? >> lead about the importance of exporting. the comments made today have suggested that often, because of the strong position the u.s. has traditionally had with respect to our internal markets, we have
not focused on exporting as much. that is what the president announced the national export initiative with the goal of doubling its in five years to support two million new jobs. we need to look for new markets. germany has been particularly successful in exporting. we need to focus on that. we're working hard to make sure small and medium-sized and businesses understand tools available to help them. one thing we are excited about in terms of the launch of many fresher america is that it will take to communities, particularly those hardest hit by such losses, the resources that many do not know about. that is not their fault. the initiative will include exposing those sized businesses to exporting tools available.
it will talk about best practices, like sustainable and manufacturing practices. it will highlight success stories of those who have successfully retooled to markets or products. it is really important for us to ensure that the information and resources available both through the federal government and state and local governments are known to small and medium-size businesses, and exporting is key to that. >> thank you. i appreciate your emphasis on small businesses. that seems to me the biggest hole in the picture. the other one, and i'm not asking you to answer this -- when we have appealed to the administration on some currency issues, individual industries -- for instance, china has pretty much from scratch began the whole paper industry. while china may have invented paper centuries ago, they did
not have much of a gutted paper industry. ohio, new york, virginia do. china imports all of its wood pulp from brazil, brings it to china, processes it, and sends it to us. this is not in your jurisdiction, but it is very important to the administration to move on investigating currency on those practices, on those kinds of issues. these companies will simply go out of business if it continues. they had always been very competitive before that. senator warner? >> thank you. i will return to that comment in a moment. i want to reiterate something
both panelists made. the entire problem we have in terms of getting manufacturing business access to capital -- we are in crisis mode where large cap companies are sitting with the healthiest balance sheets that have had in years, and the supply chain -- the chairman has talked about, in ohio -- but those sized companies are dying on the vine right now. the large companies know they will come back in orders at some time, but their supply chain -- if they can get their credit line to renew, those companies -- the traditional small businesses have been washed up. now we're cutting into companies with long years of history. if they get washed out, our economy will have a hard time getting a robust recovery by the
failure of access to capital. i wish my colleagues from the other side of the aisle were here. this small business initiative with the lending pool, state initiatives, a proven track record, programs, tax breaks -- all geared at access to credit. particularly for many fashion businesses. if we cannot accomplish that, this place is pretty darn broken. both my colleagues have been big supporters. i hope of we have that continued resistance that you will continue to look at other initiatives. waiting in lumber and in my state or others, another year or more of delay -- even if you have a healthy cash flow, you will not be able to expand and may have to shut down.
i know this is more of a speech than testimony. i want to ask nicole lamb-hale to follow up on the aspect that the chairman mentioned at the bell getting high speed rail -- my former job as governor involved economic development recruitment. my colleagues in oregon or ohio --but when we came against china, we came against brazil for their federal government was able to intervene with a sweetened package. we fell down. we have legislation called the america recruits act that would later on $10,000 extra per job on top of an already existing development effort to bring jobs back to the country.
it is targeted directly at i.t. and many freshmen. many rural communities have become much more price competitive than a decade or two ago. the jig both acts i.t. and manufacturing. i hope we will do high-speed route, and we would love to have some of that manufacturing done. that location -- to be competitive, no matter what type of tax breaks are offered by states, without that initial assure incentive on the front end -- and only available for jobs coming into the country, so would not supplement battles between states -- it would be to jobs that would otherwise go to india or china. it would bring them back. i ask you to go back and bring
more support from the commerce department and administration. >> we are increasing our inter- agency cooperation, particularly concerning access to capital, with the treasury department. in response to the request, the new one will be announced this afternoon. it is part of the recommendation of our prior counsel -- we have included as an ex-official member of the treasury department, and will have active participation of that department to try to address the access to capital issues. that was a request directly from the council. return to see what the administration can do to make sure they are dressed. >> i applaud that.
i would also urge you to look at this, what we can do in terms of creating incentives on site location. it is no longer state versus state, but america versus the world, and we need tools like others have. >> thank you. one of the things we keep confronting in our tariff barriers to american products -- last year we had the cash for clunkers program to encourage and sustain the sale of cars here. a story circulated around capitol hill that whereas we did not require the cars subsidized to be built in america because of international treaty obligations, china turned around
and did something similar, the restricted it to cars made in china. wasnot sure if that story exactly correct, but it was an example of those we hear often of barriers to american products abroad. how much truth is there to non- tariff barriers? why is it that we seem to have such a hard time playing hardball to get a fair level playing field for american products? >> to either or both of you? >> first, i would like to say the obama administration is committed to enforcing our trade laws, and we're working hard to do so. it certainly -- we believe american products are very competitive, and can beat other products from other countries if given a fair chance.
we work very hard through our import administration and in cooperation with ustr to ensure the level playing field you described. >> do you think we are there? or are there significant challenges? often the reaction among some is a hesitancy to hold other nations accountable for their non-tariff barriers for fear of triggering a trade war, and the short-term problems it could create, but how do go about holding countries accountable? >> i think that you maintain vigilance and pursuing the enforcement of trade laws. that is what the obama administration is committed to. we continue to do it. much of what we do is the subject of pending cases we
cannot speak about specifically. we understand what the does, the lack of it will do to our manufacturing base in this country. we are committed to making sure that american products can compete on a level playing field. >> [unintelligible] >> andy richter recent article about the loss of manufacturing in the u.s., and one thing he observed is that while there are firms such as intel that have sizable operations -- and we are fortunate to have a couple in oregon, there are many under firms that are designing products, but immediately set up production facilities offshore.
the compromise is ability to scale up here in the u.s. and create significant manufacturing jobs here. is this an issue we are focused on? how visit it affect jobs and national security, and how we change the dynamic? >> i agree there needs to be a strong connection between the basic research, design, and development aspects, and actual production. it certainly is a challenge. the things we are beginning to see, when you look at the total manufacturing enterprise, not just labor costs, you see a tendency to reevaluate that, and divert some of that effort back to the u.s. to tie the many freshen process more closely to
the customer base is serving. there is a way to go on that -- to tie the manufacturing process more closely to the customer base. there is a desire to look at all the components of costs, not just the labor element, but even logistics' that go with it. >> i would like to add, and partly in response to senator warner's comments about making sure america is competitive for site selection -- the secretary is working very hard on an initiative we hope to stand up shortly that will help in that regard. we do know that our states are competing with countries. we must make sure we are corporate and not choosing winners and losers among states. that the federal government weighs in so that our siting manufacturing within the u.s. is
more competitive. onwant to work with thayou that. making sure the entire package as competitive so companies can locate here, and we can create jobs we need to sustain our growth in the 21st century. >> thank you, senator. we have been called to a vote. thank you both for being here. ms. nicole lamb-hale i appreciate comments about enforcing trade law. your administration has gone further than a minister since and neither party on both manufacturing policy and enforcing trade law. the jury is still out on enforcing trade law. we need a more aggressive posture from your department, your specific portfolio, your department in the treasury, and ustr. we will talk more later.